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Verizon buys AOL

May 12, 2015

US mobile carrier Verizon has said it will absorb Internet pioneer AOL in a multi-billion-dollar deal. It added the takeover would enable it to expand its footprint in an increasingly saturated cell phone market.

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Verizon logo
Image: picture-alliance/dpa

US telecommunications company Verizon reported Tuesday it would take over one-time Internet trailblazer AOL. The deal was valued at $4.4 billion (3.9 billion euros).

AOL was one of the first Internet service providers in the US and grew at a fast pace in the 1990s, enabling it to take over media giant Time Warner in the year 2000. A couple of years later, however, AOL's star started fading amid fierce competition from rival providers.

On Tuesday, Verizon said AOL still hat a lot to offer with its huge presence in landline, mobile and Internet services. It also noted the company's crucial digital content such as The Huffington Post and a host of advertizing platforms.

Win-win situation

"We're excited at the prospect of charting a new course together in the digitally connected world," Verizon CEO Lowell McAdam said in a statement, conceding that the deal was still subject to regulatory approval.

Tuesday looked to be a good day for AOL shareholders as the stock rose almost 18 percent in pre-market trading in the US.

The cash deal valued AOL shares at $50 apiece, which was 23 percent more than the average price of the last three months. The transaction is to be completed in the next three to four months.

hg/cjc (AFP, dpa)